VALUE MANAGEMENT & VALUE IMPROVING PRACTICES

James McCuish M.B.I.M., C.V.S is a Partner in Pinnacle Results llc & a

former member of BP Amocos Integrated Business Modeling Team. He
has served in Worldwide Operations in both Management & Supervisory
roles, for 30 years, in Energy Related Businesses. As an Internal &
External Business Consultant he practices Value Engineering / Analysis,
Decision Management / Analyses and Project Management. Mr. McCuish
has conducted VE Studies and Decision Management Analyses in Oil,
Chemicals and Exploration Production Sectors & Manufacturing
Industries. He read Mechanical Engineering at The Queens University of
Belfast, Northern Ireland. He holds a Dual degree in Management &
Business Administration; Summa Cum Laude, University Honors in
Management, Syracuse University, New York

J. Jerry Kaufman

James D. McCuish

J. Jerry Kaufman, CVS, FSAVE, is President of J. J. Kaufman Associates,

Inc. He has engineering degrees from the Academy of Aeronautics and
Johns Hopkins University. As Corporate Director of Value Management
for Cooper Industries, Jerry developed and successfully implemented VE
in the corporate organization. His 25 years of progressive management
positions with the Martin Co., Honeywell, and Cooper spans the
industrial, energy, process, service and aerospace industries. Jerry has
written four books, many papers and articles on Value Management. He
is past President of SAVE, and past Chairman of the CVS Certification
Board.

ABSTRACT
We believe the potential application of the Value Methodology to Construction Project Value
Improving Practices (VIPs) is significantly underutilized in Major Capital Investment &
Construction Projects. This is particularly the case in Oil & Gas, Chemical, Refining and Process
industries in and a significant opportunity exists for effective Value Engineering practitioners to
support this global industry.
The key to capturing this market is to Define Needs then Apply (the VE) Methodology ...
regardless of whether the name Value Engineering is prominent in these high impact studies! This
paper will directly address, and coach, as to how the VM methodology can be used to first,
determine which VIPs to address on a given project, then show how by focusing on the VIPs
outcome, move VM beyond the traditional cost reduction image in capturing other value adding
attributes. We hope the content of the paper will intrigue both Practitioners and Clients as to
emerging opportunities for applications of our craft to support broad business and social results

Page 1 of 16

INTRODUCTION:
Several project Value Improving Practices, henceforth referred to as VIPs, including Value
Engineering, have been defined and their potential impact assessed by such companies as
Independent Project Analysis, (IPA), a prestigious and highly respected international
benchmarking company.
Topics the paper will address include:

VIPs in the Stage Gate Process

Placing Value Methodology in VIP delivery Context
Exhibit Simplified Examples from Case Studies (graphics are somewhat self-explanatory)

DISCUSSION:
Value Improving Practices, (VIPs), including Value Engineering, have been defined and their
potential impact assessed by such companies as Independent Project Analysis, (IPA).
While application of these VIPs is identified as being pivotal to sustaining a successful company in
the capital projects market, there are few detailed, consistent & repeatable processes for project
teams to use while delivering results from several of these VIPs other than Value Engineering. The
Value Methodology has a definite place in this regard to deliver a consistent, creative approach to
working through several of the VIPs.
In Integrated Decision and Value Management, IDVM , A powerful blend of the Value
Methodology, Decision Analyses, Project Management and Decision Analyses tools have been
proven to consistently deliver significant measurable business results when applied to the
construction industry VIPs including VE and other VIPs.
Some of the other VIPs are:

Setting Business Priorities

Design to Capacity
Technology Selection
Waste Management
Constructability

This paper shares these methods of VE/VM application to broader VIPs so as to encourage
practitioners to pursue learning and competence in application of the Value Methodology on VIPs
to meet this significant opportunity to contribute to our clients business results.
In identifying VE as a VIP, many project teams have viewed VE as a technique for reducing capital
and operating expenses. VE has sustained a high success level in this role and is sometimes
considered by other VIP advocates as a competing VIP process.

Page 2 of 16

However, Value Engineering, in its broader focus, the Value Methodology, is an excellent thinking
and analyses methodology for addressing and resolving the challenges of other VIP initiatives, in a
way that keeps them in balance.
NOTES ON BENCHMARKING
One of the major Benchmarking service organizations is IPA. According to IPA the outcomes of
projects can be predicted by understanding the historical relationship between project drivers
(characteristics, technology, and project management practices) and the project's final outcomes.
IPA asserts project histories contained in databases act as clear guides to understanding and
quantifying the relationship between project inputs and project outcomes. Further, while every
project is unique in some respect, it is possible-with sufficient information-to compare
performances on an even basis.
The type of information IPA collects in interviews with project team members.
Include General information on Project, Project Management information, Project Definition and
Estimates / Actual results on Costs, Operational Performance, Schedule, Technology and
documentation application of the number of potentially applicable Value Improving Practices
which were actually performed.
According to IPA This project-specific comparison is important for understanding and quantifying
the cost, schedule, and operational performance trade-offs necessary to produce a project that is
optimal to the particular business circumstances.
We believe a major challenge is in the actual delivery methods for the chosen VIPs and that the
Value Methodology, together with other proven Disciplines, can supercharge the impact of VIP
work in Construction & Capital Projects!
What is a Value Improving Practice?
Value Improving Practices, (VIPs,) when applied ought return measurably improved project
outcomes (e.g., cost, operability, schedule, reliability, safety, etc.). A VIP does not improve one
outcome at the expense of another. Further the collective application of the VIPs should add
positive impact on FULL CYCLE RETURN ON INVESTMENT rather than Checking a
Box in a list of Project Management behaviors as does occur in many cases.
A key attribute associated with this description is that the practices be applied in a systematic
approach with a methodology that allows them to be repeatable and consistent from project to
project when they are applied. Herein lies the opportunity for the Value Methodology (Augmented
by Decision Analyses tools) to deliver a consistent, proven and repeatable process to implement the
VIPs in a fashion that delivers measurable results!
To best use its resources, the company refines its list of VIPs as those that will generate the greatest
return on the portfolio of work. In doing this, a company should determine what practices they

Page 3 of 16

believe add value within their system and determine how best to adapt them to their culture and get
the optimum results from applying them.
For example, the Value Engineering Pre-Event is an excellent methodology for implementing the
VIP of Setting Business Priorities for a Project team. This is addressed in the Understanding
Clients Needs Section
Example VIPs
Each company tends to have their own view of the exact interpretation of VIPs and some companies
have extra VIPs in addition to those normally tracked in the benchmarking data sets across
industry. The following examples include some of the VIPs most used and several of those that can
benefit from application of the Value Methodology and from toolsets generally used in the Job Plan.
VIPs that we have found particularly suitable to Value Methodology use have been noted by
(VMO) for Value Methodology Opportunity! (To avoid confusion we noted (VMO) alongside
Traditional Value Engineering below.)
Setting Business Priorities (VMO): A communication process that identifies the decision makers
& stakeholders requirements and the expectations associated with a business opportunity and
translate them into measurable project objectives, ranked according to their relative importance to
the business strategy. It puts the decision makers & stakeholders of the business opportunity in
synchronization with the project team who are charged with delivering the business results.
Customized Standards & Specifications: A method for selecting the codes, standards and
specifications most applicable to the selected project, making necessary modifications to meet
project goals and objectives, and ensuring that the selection does not exceed actual project specific
requirements.
Waste Minimization and Management (VMO): A formal and disciplined process-stream-byprocess-stream analysis of ways to eliminate the production of waste products or non-useful streams
from a process, as well as the methodology for managing any remaining waste streams.
Design to Capacity (VMO): A structured methodology to address design capacity against business
needs and to eliminate hidden capacity. It focuses on the precise alignment of units, systems,
equipment and bulk within a range of capacity performance. The outcome of the Design to Capacity
Value Improving Practice should provide the base case process design for your detailed design.
Technology Selection (VMO): A systematic search both inside and outside the company for
manufacturing/processing technology that may be superior to that currently employed on projects to
ensure that the technology used is the most competitive available technology aligned with the
Projects Business Objectives.
Traditional Value Engineering (VMO): A facilitated, structured workshop to identify and achieve
the needed functionality of a selected work process, facilities design, or equipment design at the
lowest life cycle cost.

Page 4 of 16

Process Simplification (VMO): A facilitated, structured workshop focused on simplifying

development, facility, processing, or equipment requirements while satisfying needed functionality
to deliver business outcomes.
Constructability (VMO): A systematic method that enables a project team to optimize the use of
construction knowledge and experience in planning, engineering, design, procurement, fabrication
and installation to achieve overall project and safety objectives.
Energy Optimization: This practice is an analytical study (utilizing pinch technology) in order to
focus on energy options. The intent of energy optimization is to identify the optimal energy types
and energy usages within a process and/or site by considering economic trade-offs and overall
operability.
Facility Systems Performance: This practice provides a form of computer modeling used in
forecasting performance to balance sales, operation and maintenance needs at the best cost. It
provides a project team a more effective means of assessing, in advance, the cost/benefit impact of
changes in design, operations, spares, training and/or maintenance of a facility.
Predictive Maintenance: An approach to maintenance whereby all maintenance techniques
(breakdown, preventative, predictive, etc.) are integrated to achieve project objectives and
maximize business value. Maintenance Excellence enhances business value through increasing
uptime, product quality, yield, and capital productivity.
Life Cycle Engineering Information Management (more than 3D Computer Aided Design) The
management of engineering information (including drawings, documents and data) using computer
systems so that it can be of value throughout the life cycle of the asset, including the project phases,
operations and maintenance and final decommissioning and demolition.

BACKGROUND ON VIPS & STAGE Gate processes.

While many companies have Stage-Gate Project Decision making processes, essentially
conforming to the FEL 1, 2, 3, Project Implementation, Operate however some have more
Project Management / Business Focus Stages.
Note: FEL above refers to Front End Loading
The following section places example VIPs in a representative Stage Gate process.

Page 5 of 16

Many clients have Stage / Gate

business processes to enable some
clarity of thought in using Thinking
Methodologies to improve their
likelihood of achieving their goals.
Figure 1 depicts one such process.
In the process of stages and gates,
shown the company gradually invests
resources in a series of Stages and
Decision Gates. The companys
teams use various value improvement
methods including Value Engineering.
The rational for such a progression, can
be seen from the classical Influence vs.
Expenditures curves shown in Figure 2

age
t each st
Gates a
APPRAISE
APPRAISE

SELECT
SELECT

Gate

DSP

Gate

DSP

DEFINE
DEFINE

Gate

DSP

EXECUTE
EXECUTE

Gate

DSP

OPERATE
OPERATE

Gate

DSP

Appraise
Select
Define
Execute
Operate
As we Monetize an Asset from
Ideation to Revenue Generation
we do so in a series of definable Stages
associated with Major Funding decisions.
(FEL 1,

FEL 2,

FEL 3,

Implement,

Operate)

Figure 1

Project Life Cycle

Value Influence vs. Expenditures
Major Influence

Rapidly Decreasing
Influence

I
N
F
L
U
E
N
C
E

Low Influence
E
X
P
E
N
D
I
T
U
R
E
S

Final Authorization

Front End Loading

As we move further into

investing in a capital
project we lose the ability
to influence / change
direction of the project.
Some of the various
Value Improving
practices used in
advancing a capital
project are shown in
Figure 3.

In engaging & serving

such companies, the
Appraise
Select
Operate
Define
Execute
VE/VIP Practitioner is
expected to be familiar
Figure 2
with all of the various
Value Improving Practices and is expected to recommend as appropriate ... and in many instances,
is expected to deliver a tailored methodology, selected to meet the project teams specific needs

Page 6 of 16

Project Authorization

Potential of Impact Value

From an aspect of
assurance of quality in
progression of a Capital
Investment, strategically
managed companies will
focus on different value
measures to improve as
the potential asset /
project is brought to
fruition. Figure 3.

Front end loading

Co
ns
De
tru
s
R
Va eli Co ign En
ct
ab
W Pe lue abi de -to erg
a
s
ilit
l
y
i
st rso En ty , S Ca U
Te
y
ch Pr e M nn gi Mo tan pa til
cit iza
no oce in el ne
d
d
lo ss im Sa eri elin ard y tio
gy S iza fe ng g s
n
&
Se im tio ty
S
pe
lec pli n &
D
cif
tio fica M
An eci
ica
n tio an
Ma a sio
tio
n
ag
na lys n
ns
em
ge es
m /
en
en
t
t

The VIPs depicted in

Figure 3 do not exactly
match the list of VIPs on
Page 5. This is not
unusual. Companies
tend to Mix & Match
VIPs and develop there
own internal VIP
names to suit their
project management
Figure 3
culture. However the
following VIPs tend to be universally recognized. :
Setting Business Priorities
Design to Capacity
Technology Selection
Waste Management
Value Engineering
Constructability

The improvement in quality focus, which is expected to aid Project Teams in delivering
measurable results, Figure 3, will require different types of facilitated intervention. Without
question, the Value Methodology can, play a major part in delivering that quality / value
improvement. However it is not the only methodology used. The VE/VIP Practitioner is well
counseled to be aware of, and competent in, the others, including Decision Analyses & Framing
Methods, particularly in the VIP of Setting Business Priorities in Project/Investment stages of
APPRAISE & SELECT (or FEL 1 & FEL 2)
If we use the Stage Gate example process shown in Figure 1 a basis, we can place potential
Value Methodology Opportunities in the context shown in Figure 4. We have chosen not to select
Custom Standards & Specifications as a significant VM opportunity, however the framing and
discovery parts of the Job Plan can be very useful in uncovering the true functions to be achieved by
selected Specifications & Standards and can often aid teams in discussing options.

Page 7 of 16

PLACING THE VALUE METHODOLOGY IN THE VIP DELIVERY CONTEXT

EXAMPLE VALUE
IMPROVING PRACTICE

Clear
Applicability of
the Value
Methodology

Typical Stage
for VIP
Application

Setting Business Priorities

Chosen in
our
Example

Select Define

Custom Standards &

Specifications
Technology Selection

Select
Define
Define Select
Define
Select
Define
Select
Define
Define Define
Define

Design to Capacity
Waste Minimization &
Management
Process Simplification
Value Engineering
Constructability
Energy Optimization
Facility Systems
Performance
Predictive Maintenance
Life Cycle Engineering
Information Management
Figure 4

Define
Define

ASSESSING THE CLIENTS NEEDS

When the VE/VIP practitioner embarks upon a Client needs assessment, it is simply not enough
to ask of the client Would you like a Value Engineering intervention? Rather the VE/VIP
practitioner has to place the impact of Value Engineering and other methods in the context of the
companys project management & business process.
We do have good "Pre-Event" or Discovery methodologies available to us to set up a VE study
often used when we have ascertained that VE is appropriate. These discovery methods can be
effectively used to uncover the appropriate Value Improving Practices ... even if they do not include
Value Engineering!
We must listen carefully, probe definitively, and if required, we must be comfortable in
recommending an intervention / analyses process far removed from the VE job plan. However one
may recommend to a client, (who may have "asked for Value Engineering" ... perhaps because they
didn't understand the method and outcomes in depth,) ... that they really need a different analytical
process!

Page 8 of 16

SELECTING POTENTIALLY APPLICABLE VIPS

Example Project Using the Value Methodology Pre-Event to Deliver Setting Business Priorities VIP
Contractor FEED
"WORST
ACCEPTABLE"

1
Schedule

1-Sep-04

120%

As Per
Design
7

BASE A3
Meets Function
Specs

1
4
98

BASE A4
Up Time Reliability

97
Marginal

Informal

Appicable
Regs

100

250

BASE A9

Ref. P/C
Weight

1-May-04

21%

80%

16%

10

14%

10

6%

99.8

7%

Best
Practice

0%

Company
Policy

4%

1000

21%

0.8

11%

BASE A8
Opex

10

BASE A7
Design Fatigue Life

BASE A6
Emissions

99

BASE A5
Project Organization

100%
5

BASE A2
Operability

1-Jul-04
4

BASE A1
CAPEX (1)

"REALLY
GOOD"

Value Matrix

1.5

1
2

Figure 5
By using such tools as the Value Attribute Matrix shown in Figure 5 we can discuss which VIPs may
be appropriate to move the Project Base Case Attributes (shown above in the BASE A1, BASE
A2, etc line) higher on the Scale of Goodness: and place the VIPs in an order of priority with
guidance from the Paired Comparison Project Team Exercises, (Kaufman, Fallon, McCuish)
Delivery of the Value Improving Practices can be accomplished first by clear thinking to develop a
VIP Value Focus frame prior to engaging work then reviewing that frame within each VIP. The
following suggests methodology to facilitate this concept as part of the teams normal workload,
rather than additive
When teams are first confronted with the charge to Deliver Value Improving Practices or VIPs,
the task often appears daunting and begs such questions as Why, how will that really help? Or
perhaps elicits comments like We do that stuff as part of our normal work!

Page 9 of 16

Using the methodology outlined in this paper, the team may integrate the VIP work into their
normal activities and also may exhibit the REAL Value Improvement they have achieved in use
of the selected VIPs!
The appropriate VIPs are worked over time in an integrated fashion rather than orphaned in
individual workshops or studies. In most cases this approach has actually caused less total work,
and in one recent case significantly reduced the overall FEED cost, in addition to measurably
improving the Project at hand.
Figure 6 depicts an example set of VIPs chosen by a project team.

EXAMPLE of Potentially integrated VIPs

Example : Value Improving Practices Planning

Value Method
Pre-Event

(Setting
Business
Priorities)

FEL 3
Technology
Selection

Design to
Capacity

Waste
Minimization
& Management

Value
Engineering
Custom
Standards &
Specifications
Analyses of
Technical &
Operational
Functions
F.A.S.T.

Build or
Execution
Phase

Value Method
Dimension F.A.S.T for each VIP /
Brainstorm Improvement Ideas
/
Select Ideas/ Develop Scenarios

Final
Constructability
Review
Value Method
.
focused on
Constructability
Copyright :

Pinnacle Results
VIP Delivery Concepts

Analyses of
Construction
Functions
F.A.S.T.

This Methodology delivers the chosen VIPs over time, in a linked systematic fashion
rather than conducting orphaned, separately focused, multiple workshops.
The Analyses of Function is dimensioned according to the focus of each VIP.

Figure 6
The team first works through Setting Business Priorities and Custom Standards and
Specifications. We have noted the use of the Value Methodology for working through framing of
the Business Priorities.

Page 10 of 16

Using our Integrated VIP delivery approach, the core Guidance Graphic for addressing these
VIPs, or F.A.S.T, is an overall reference graphic. It is used with each of the remaining VIPs, other
than Constructability.
For Constructability a separate, yet associated, F.A.S.T. is developed to depict the Functions to be
achieved in the actual Construction & Commissioning work.
Essentially this method provides the team with a consistent graphic to easily reference with respect
to Value Focus of Functionality during the application of the remaining VIPs.
We believe the hallmark of our method is clear communication of Functionality, which will reduces
the total workload for the team and should deliver measurable value to the project.
Lets say, for example, the team had chosen the VIPs shown in Figure 6, & Figure 7 and wished to
integrate them, rather than have individual workshops / meetings to apply rational thought to
delivery of the VIPs.

Value Focus of chosen VIPs

Example : Value Improving Practices Planning
Value Focus of each VIP
Deliver clear direction and targeted
project goals to the project team
so ALL of their VIP and Project
Management work is aligned with
Value Method
the Corporate
Business Goals for
Pre-Event
the Project

(Setting
Business
Priorities)

Technology
Selection
Design to
Capacity
Waste
Minimization
& Management

Ensure best technology applied from industry and

peers : I.e. Balance of Risk, Operability and Cost
Ensure each part of the design is aligned
with the required through-put Capacity

Ensure each part of the design is aligned

with the required Waste Minimization
imperatives & Specifications for the
Project at hand.

Deliver Engineered Value in

Cost, Schedule, Operability and
P & IDs
Full Cycle Return on Investment

Final
Constructability
Review

Value
Engineering

Custom
Standards &
Specifications

Analyses of
Technical &
Operational
Functions
F.A.S.T.

Build or
Execution
Phase

Value Method
Dimension F.A.S.T for each
VIP /
Brainstorm Improvement
Ideas /
Select Ideas/ Develop Scenarios

Selecting the codes, standards

and specifications most applicable
to the project, making necessary
modifications to meet project
goals and objectives, and ensuring
that the selection does not exceed
actual project requirements.

Ensure all facets of the

Construction plan are
optimized for
Planning, Engineering, Design,
Procurement, Fabrication and
Installation to achieve overall
project and safety objectives

Value Method
.
focused on
Constructability

Copyright :

Analyses of
Construction
Functions
F.A.S.T.

Pinnacle Results
VIP Delivery Concepts

The Analyses of Function is dimensioned

according to the focus of each VIP.

Figure 7
We would assume the team has conducted a Project Framing or Setting Business Priorities
workshop a the start of the Project Stage, and have discussed the range of acceptable outcomes of
application of the VIPs using the Value Methodology toolsets.

Page 11 of 16

The yellow boxes in Figure 7 depict the Value Focus of each of the chosen Value Improving
Practices for the Project. While Figure 7 may appear a little overwhelming at first glance, the
following pages show simplified examples of a rational and integrated methodology for working
through these Value Improving Practices as part of the work of the project team.
The methodology is designed to capture potential Value Improvement and to aid the team in
achieving the VIPs working with effective VE/VIP Practitioners & Company staff.
Each VIP is addressed in turn; following Setting Business Priorities & Custom Standards &
Specifications, the analyses of Required Functionality will provide an integrated link to all VIPs
and will aid the team in considering a consistent business results alignment. However the VIPs
chosen may be addressed in the SAME workshop, or Study, without the need for multiple separate
VIP meetings!

EXAMPLE Simplified Case Study

The Function Analyses System Technique (FAST) diagram
is a graphical depiction of the FUNCTIONS which must be
achieved rather than specifying the particular
equipment or technology to be used.

Remove
Water
Vapor

Ask How?

Ask Why?

Teams share the same base under-standing for

brainstorming the selected VIP target options.

The VIP team then chooses the "High Impact Potential

Functions" & Subsystems to concentrate on in the
"targeted" VIP brainstorming.
Targeted VIP brainstorming based upon improving delivery
of required functions without sacrificing %ROI is a
cornerstone of Value Engineering Theory.
These analyses are normally related to Return on Full
Cycle investment rather than simply "cost cutting."
As they exercise the FAST ... Teams think about
(1) other ways to achieve these functions ... and also
(2) other ways to improve the existing equipment
utilization with respect to the chosen VIP targets at
hand!
Ship
Product

Fill
Shipping
Containers

12
Measure
Product

Store
Product

11

Transport
Powder

Scrub Gas

Read "When" - or Achieved at the same time

The FAST may be "dimensioned" with function:

"Cost," "Schedule,
"Contribution to Waste,"
Misalignment with Throughput Capacity,
Technology Options / Selection,
Constructability Attributes, etc.

Cool Gas

Pressurize
Conveying
Gas

Transfer
Heat

Reduce
Pressure

Dry
Product
Solids

10

9
Recycle
Liquid

Integrated VIPs
Process Industry
Section Example

Recover
Vent Vapor
Energy

Separate
Product
Solids &
Liquids

Cool
Reactor
Contents

Transfer
Heat

Crystallize
Product

Convert
Impurities

Re-Cycle
Water

4
Heat
Fluids

Hydrogenate
Product

Mix
Product
with Water

Produce
Acid Free
Product

(Water with
Impurities)

Supply
Hydrogen

Figure 8
Figure 8 Shows an Example F.A.S.T., with only the major logic path functions numbered for

simplicity.

Page 12 of 16

Separate
Product
Solids and
Fluids

The Graphic on the previous page, in Figure 8, is extracted from a larger and more complete
F.A.S.T. and has been changed and the equipment list changed, to ensure confidentiality. However
it will serve to exhibit the concepts of multiple-use, as the Project Team focuses on each of the
chosen VIPs.

Traditional Dimensioning of the F.A.S.T. with Total Installed Cost / Function

20.0%
8.3%

20.0%
8.3%

20.0%
8.3%

20.0%
8.3%

1
Separate Solids &
Fluids

20.0%
8.3%

Product Free
Product

Mix wirh Fluids

12.5%

Heat Fluids

12.5%

Hydro-Genate
Product

8.3%
33.3%

Remove
Impurities

8.3%
33.3%

7
Crystalise Product

8.3%

8
Separate Solids &
Liquids

8.3%

Dry Product
Solids

Total
Installed $
Cost
(Millions)

TIC
Multiplier

10

Store Product

Equip $
Cost

11

Fill Shipping
Containers

Hardware

12

Transport Product

Function

8.3%

8.3%

33.3%
12.5%

33.3%

Major Equipment

1.00

$
$
$
$
$
$
$
$
$
$

4.0
4.0
4.0
9.5
93.0
36.0
24.8
32.7
10.4
6.1

1.00
1.00
1.00
1.00
1.00
1.00
1.00

$
$
$
$
$
$
$

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

10

33.3%
16.7%
20.0%
12.5%

224.5

$13.3

$23.0

20.0%
12.5%
25.0%

20.0%
12.5%

$22.7

$21.1

12.5%
33.3%
16.7%
20.0%
12.5%
25.0%

$38.3

12.5%

33.3%
12.5%

33.3%
16.7%
20.0%

16.7%

16.7%

12.5%
25.0%

12.5%

$22.9

$6.6

12.5%

$23.8

$14.1

12.5%

16.7%
12.5%
25.0%

$14.6

$16.7

$7.6

COST OF FUNCTIONS
$45.0
$40.0

$38.3

$35.0
$30.0
$25.0

$23.0

$20.0
$15.0
$10.0

$22.7

$23.8

$21.1

COST OF
FUNCTIONS

$22.9

$14.6

$14.1

$13.3

$6.6

$16.7
$7.6

e
St
or

on
ta

in
er

$5.0
$Pr
Tr
od
an
uc
sp
t
or
tP
ro
D
ry
du
Pr
ct
Se
od
pa
uc
ra
tS
te
ol
So
id
lid
s
s
&
Li
C
qu
ry
st
id
al
s
is
e
Pr
R
od
em
uc
ov
t
e
H
Im
yd
pu
ro
rit
-G
ie
en
s
at
e
Pr
od
uc
t
H
ea
tF
lu
M
id
ix
s
w
irh
Pr
od
Fl
ui
uc
ds
tF
Se
re
pa
e
Pr
ra
od
te
uc
So
t
lid
s
&
Fl
ui
ds

COST TO ACHEIVE FUNCTION

EXAMPLE ONLY
A FAST Diagram
traditionally
dimensioned with
$ Cost.
The same FAST
may also be
dimensioned with
the target
Attributes of
Applicable VIPs
eg. Waste,
Capacity,
Simplification,
Technology,

Sh
ip
pi
ng

Fi
ll

TOTAL

12.5%

8.3%
33.3%

FUNCTIONS from FAST

Figure 9

Page 13 of 16

If we then interrogate the FAST with contribution to Waste or to Emissions we may get a graphic as
in Figure 10 to aid team discussion. This gives the team a touchstone to hold creative discussions and
focus upon the VIP of Waste Minimization. The REST OF THE VE METHODOLOGY NOW
APPLIES!

8.3%

20.0%
8.3%

20.0%
8.3%

12.5%

33.3%
12.5%

Separate Solids &

Fluids

8.3%

2
Product Free Product

12.5%

Mix wirh Fluids

12.5%

Heat Fluids

8.3%

Hydro-Genate
Product

8.3%
33.3%

6
Remove Impurities

20.0%
8.3%
33.3%

Crystalise Product

8.3%

Separate Solids &

Liquids

20.0%
8.3%

9
Dry Product Solids

10

Store Product

Contibution to
Waste /
Emissions/ Heat
loss in
Appropriate Units
/ Year

11

Fill Shipping
Containers

Hardware

12

Transport Product

Function

8.3%

20.0%
8.3%

Major Equipment
1

10

5.00
2.00
7.00
8.00
12.00
45.00
13.00
22.00
55.00
12.00

12.5%
33.3%
16.7%
20.0%

16.7%
12.5%
25.0%

TOTAL

181.00

12.5%

14.71

21.73

30.0

33.3%
16.7%
20.0%
12.5%

10.88

12.5%
25.0%

11.54

12.5%

21.73

12.5%
25.0%

8.54

15.21

12.5%
16.7%
20.0%
12.5%

20.0%
12.5%

33.3%
12.5%

33.3%

16.7%
20.0%

16.7%

25.0%

14.61

15.28

13.90

6.00

Potential High Waste Related Functions

21.7

21.7

20.0
15.0

15.2

14.7
10.9

14.6

15.3

13.9

11.5
8.5

10.0

6.0
5.0

ro
du
Pr
ct
Se
od
pa
uc
ra
tS
te
ol
So
id
lid
s
s
&
L
C
iq
ry
ui
st
ds
al
is
e
Pr
R
od
em
uc
ov
t
e
Im
H
yd
pu
ro
rit
-G
ie
en
s
at
e
Pr
od
uc
t
H
ea
tF
lu
id
M
ix
s
w
irh
Pr
od
Fl
ui
uc
ds
tF
Se
re
pa
e
Pr
ra
od
te
uc
So
t
lid
s
&
Fl
ui
ds

rt
P

D
ry

Pr
od
e

an
sp
o
Tr

St
or

on
C
g
in
pp
Sh
i
ll
Fi

uc
t

0.0
ta
in
er
s

A FAST Diagram
dimensioned
with Appropriate
Waste or
Emissions
Contribution of
FUNCTIONS

26.88

26.9

25.0

Contibution to Waste

EXAMPLE ONLY:

12.5%
33.3%

8.3%
33.3%

FUNCTIONS from FAST

Figure 10
The Analyses also sets the team up to Exhibit Measurable impact of the VIP discussions.

Page 14 of 16

Similarly, if we then interrogate the FAST with potential for Technology Options, we may get a
graphic as in Figure 11 to aid team discussion. This gives the team a touchstone to hold creative
discussions and focus upon the VIP of Technology Selection. Again The REST OF THE VE
METHODOLOGY NOW APPLIES!

8.3%

20.0%
8.3%

20.0%
8.3%

12.5%

33.3%
12.5%

Separate Solids &

Fluids

8.3%

2
Product Free Product

12.5%

8.3%

20.0%
8.3%

Mix with Fluids

12.5%

Heat Fluids

8.3%

Hydro-Genate
Product

8.3%
33.3%

Remove Impurities

20.0%
8.3%
33.3%

7
Crystallize Product

8.3%

Separate Solids &

Liquids

20.0%
8.3%

9
Dry Product Solids

Hardware

10

Store Product

Ranking
1-10 for
Potential
Technology
Options

11

Fill Shipping
Containers

12

Transport Product

Function

Major Equipment
1

10

3
6
9
2
5
8
3
5
1
1

TOTAL

33.3%
16.7%
20.0%

12.5%
25.0%

2.60

12.5%

4.67

8.0

12.5%
33.3%

7.52

33.3%
16.7%
20.0%
12.5%

4.25

12.5%
25.0%

1.50

12.5%

4.67

12.5%
25.0%

1.25

2.77

12.5%
16.7%
20.0%
12.5%

16.7%
20.0%

16.7%

25.0%

2.73

5.25

3.54

2.27

Index of Potential for Discussion and Creativity focus Functions

6.0

5.3
4.7

5.0

4.7

4.3

3.5

4.0

2.0

33.3%

7.5

7.0

3.0

20.0%
12.5%

33.3%
12.5%

2.8

2.6
1.5

2.7

2.3

1.3

1.0

C
on
ta
in
er
St
s
or
e
Pr
Tr
od
an
uc
sp
t
or
tP
ro
D
ry
du
Pr
ct
Se
od
pa
uc
ra
tS
te
ol
So
id
lid
s
s
&
L
C
iq
ry
ui
st
ds
al
liz
e
Pr
R
od
em
uc
ov
t
e
Im
H
yd
pu
ro
rit
-G
ie
en
s
at
e
Pr
od
uc
t
H
ea
tF
lu
id
M
s
ix
w
ith
Pr
od
Fl
ui
uc
ds
tF
Se
re
e
pa
Pr
ra
od
te
uc
So
t
lid
s
&
Fl
ui
ds

0.0

Fi
ll
S

hi
pp
in
g

A FAST
Diagram team
opinion as to
the Potential
Technology
Options Focus
of FUNCTIONS
& Subsystems

16.7%

43.00

Opinion on Technology Options

EXAMPLE
ONLY:

12.5%

8.3%
33.3%

FUNCTIONS from FAST

Figure 11
Rather than show more repetitive graphics, its a reasonable extrapolation to visualize the similar
approach we use for Misalignment with Capacity, whether start-up or operating and also for
Process Simplification opportunities.

Page 15 of 16

Again, a separate Pre-Event and separate F.A.S.T. is developed for the Constructability VIP
which focuses specifically on Construction and Commissioning improvement. Its rational to wait
until we have a good idea of what were going to build to engage the Constructability VIP,
however, we can expect to consider some Constructability issues in earlier VIPs also.

CONCLUSION
In a recent discussion on VIP application, an Operations Representative from a Chemical Plant
quipped, Isnt it all Value Engineering?
It would undoubtedly be a stretch to attempt to encompass all the VIPs as Value Engineering.
However, there clearly is a place for our Value Methodology to provide a detailed, consistent &
repeatable process for project teams to use while delivering results from many of the Construction
Industry VIPs, which are most often chosen.
Not only does the Value Methodology have a place in this regard to deliver a consistent, creative
approach to working through several of the VIPs, when used as part of a Stage / Gate Project
Management Process, it can aid teams to reduce their total workload and deliver Real
Measurable Results rather than Checking of Boxes as the VIPs performed!

REFERENCES
Kaufman, Joseph J. & Carter, Jimmie, L. The Pre-event Phase SAVE Proceedings 1998,
International Conference, p. 196 208
Kaufman, J. Jerry, "Value Management A Methodology, Not A Tool", Value World, Vol., 15 No. 1,
1992, p.13-17.
Carlos Fallon. (1990) Value Analysis Second Revised Edition, Wiley Interscience
McCuish J. The Power & Pitfalls of Pre-event / Base Case Definition in practicing Value
Engineering. SAVE Proceedings 2000, International Conference.

Page 16 of 16